Should You Use Your House As Collateral On A Bail Bond?

If a loved one has been arrested and is in jail with a bail set, you are probably pretty desperate to pay the bail to secure their release. Depending on how much the bail is, you may or may not be able to pay it easily. If you don't have the cash available, you may be able to get a signature bail bond if your credit is good and you have verifiable references. In most cases, though, you will need to put up some collateral to pay a large amount of bail. Even though most bail bonds businesses only require a percentage of the bail in cash (usually 10 to 20 percent), you must show you have the resources to pay the rest of it if the person you are bailing out does not show up in court.

You can use your car, expensive jewelry, electronics, and more as collateral. Anything of value will usually do. In cases of very large amounts of bail money, you may consider putting your house up as collateral. You can do this, but should you? Here are some of the things you should consider before using your home as collateral on a bail.

1. Will the Person You're Bailing Out Actually Appear in Court?

Only you know if the person you're bailing out of jail is likely to appear in court. Most defendants do go to court, but a small percentage of them skip bail and disappear (usually going into hiding here or abroad). This typically only happens with people accused of serious crimes, but it can happen with anyone.

The bail bonds business relies on your knowledge of the person you're bailing out to help you make a good decision about using your house as collateral. If you don't think the person will appear in court, or aren't sure, don't use your house as collateral unless you are wiling to lose it in exchange for seeing your loved one remain free (and on the lam).

2. Do You Have the Cash to Pay the Bail?

If you have the cash to pay the bail up front, you should go ahead and do it. It's a far safer method than using your house as collateral. If you don't have the cash now, consider your options for raising it before the accused's court date.

If they don't show up in court, you are responsible for paying the full amount of the bail money. If you don't have it or haven't been able to raise it in that time, the bail bonds business will foreclose on your house and you will be out on the street.

3. Do You Have Enough Equity In Your Home?

If you are comfortable with the idea of using your home as collateral on bail money, you have to consider if it will be accepted. According to EnlightenMe.com, most bail bonds companies require at least 150 percent equity in a home to accept it as collateral. Some companies may accept less equity. You will need to have some, though.

Call around to different companies like Absolute Bail Bonds until you find one that will accept the amount of equity you have in your home. If you don't have enough equity, you may need to put up several other items of value as collateral in addition to your house in order to pay the bail. Consider how many things of value you're willing to lose to bail your loved one out of jail before making a decision about this.

Conclusion

You can use your house as collateral on bail in most cases, but whether you should is another question. Ultimately, the decision is up to you and what you're willing to risk. If you believe using your house as collateral is the right choice for you, go to your nearest bail bonds business and start the paperwork to free your loved one.

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About Me

A few years ago, my brother divorced his wife. During the divorce proceedings, his soon-to-be ex-wife went after everything they owned together, and even the things my brother earned on his own. It devastated my brother's finances so much that he filed bankruptcy. Although bankruptcy gave my brother a chance to rebuild his life, it wasn't the only option available to him. My brother could also consolidate his expenses to rebuild his finances over time. However, bankruptcy seemed like the fastest option for him at the time. My brother's divorce and subsequent financial problems didn't happen to me personally, but they did teach me about consumer law, money and financing. I used that knowledge to build my blog. I hope that the information helps you find the solutions you need for your own financial problems.